CEO 23-3—April 26, 2023
MEMBER OF CITY COUNCIL VOTING ON SEPTIC TO SEWER
To: Name withheld at person's request (Cocoa))
A voting conflict would be created under Section 112.3143(3), Florida Statutes, where a City Councilmember votes on whether the City should proceed with a septic-to-sewer conversion project that would involve such a conversion for her residence because the Councilmember would receive guaranteed funds (gains) from the City and would have a mandatory outlay of funds she would personally incur if the project were underfunded (losses), thus, incurring a special private gain or loss. Guidance is also provided on related votes. Referenced is CEO 78-74.
Would a City Councilmember have a voting conflict under Section 112.3143(3)(a), Florida Statutes, if she voted on matters concerning a septic to sewer conversion project that would affect her residence?
This question is answered as follows.
In your letter of inquiry and additional information provided to our staff, you indicate that you serve as City Councilmember in the City of Cocoa, Florida. You inquire whether you would have a prohibited voting conflict if you voted on various matters pertaining to a project, the goal of which is to lower the level of pollution in the Indian River Lagoon.
Brevard County has adopted a plan, the Save Our Indian River Lagoon Project ("SOIRL" Plan), which includes multiple projects designed to restore the condition of the Indian River Lagoon. One of these projects, the J & K Septic to Sewer Conversion Project,1 would affect 88 residences along a part of Indian River Drive, one of which is yours. The J & K Septic to Sewer Conversion Project would entail: 1) constructing a new sewer line in the Indian River Drive public right-of-way; 2) constructing lateral sewer lines to connect each of the 88 residences to the new sewer line; and 3) removing the existing septic tanks from the residences.
With regard to funding, the County passed and implemented a 0.5-cent sales tax referendum for the SOIRL Plan in 2017. At the time of your request, there was a maximum of $6,167,373 SOIRL grant funds (comprised of revenue generated from the sales tax) available to the City for allocation to the J & K Septic to Sewer Project, provided the lot owners of all 88 residences agree to convert from septic to sewer. If the lot owners of any of the 88 residences do not agree to participate in the J & K Project, the amount of available SOIRL grant funds will be reduced in proportion to the percentage of residences that do not participate.2 In order to obtain the maximum amount of SOIRL grant funding, the City plans to make connection to the sewer mandatory for the 88 residences.3 At the time of the request, the estimated cost for construction of the sewer line, construction of the lateral lines and removal of the septic tanks for the 88 residences was between $9,556,320 and $11,956,320. Thus, even if the maximum amount of SOIRL funding is received, it will not be adequate to complete the J & K Project without additional funding. According to you, the City is hoping to secure additional funding through grants, but the City does not presently have any arrangements for additional funding. Ultimately, if participation in the program is mandatory and there is not enough funding to construct the lateral lines to connect the 88 residences to the sewer main line and to remove the septic tanks from those residences, the City will require the lot owners of the 88 residences to pay any remaining costs.
The cost of connecting the residences to the sewer line and removing the septic tanks will vary on a lot-by-lot basis depending on each lot's characteristics and complexities (e.g., lot size, depth and elevation, obstructions, whether there is coquina rock under the residences, the location of and accessibility to the septic tanks, the length of lateral pipe required, etc.). During a preliminary field inspection of the 88 residences by City staff, the lots were placed into four groups (or "tiers") as a means of demonstrating the potential range of estimated costs to the homeowners. The estimated amount of PVC line that would be required for Tier 1 was 50 feet. The estimated amount of line required increased in Tiers 2 and 3 and to an estimated amount 275 feet for Tier 4. The estimated cost per lot for constructing the lateral lines and removing the septic tanks for Tier 1 (comprised of 18 lots) was $24,420, which increased to $62,640 for Tier 4 (comprised of 4 lots).4 The City has not determined which tier your connection would fall in, though, after privately obtaining a professional estimate, you estimate the cost to construct the lateral line and remove the septic tank for your residence to be $23,160, which would place you in Tier 1.
The City Council is considering three options with regard to the J & K Septic to Sewer Conversion Project. The first option would be to move ahead with the Project, which would include mandating that the lot owners of the 88 residences connect to the sewer and pay funding shortfalls in the event funding obtained by the City is exhausted. Under this option, there would also be a possibility that the City Council would initiate court action against those who refused to comply and/or to pay their private funding obligations.
The second option would be for the City Council to vote to withdraw from the J & K Project. If the City withdraws from the J & K Project, the lot owners of the 88 residences could apply for and receive funding from the County (in amounts up to $18,000 per residence) to purchase Advanced Septic Treatment Systems that satisfy the advanced requirements for such replacements as outlined in the SOIRL Plan.5
The third option would be for the City Council not to take any action on the matter at this time and, in essence, postpone making any decision. The City would continue to maintain the $6,167,373 SOIRL grant funds during the delay, but the lot owners of the 88 residences would not be able to apply for or receive any advanced septic replacement funding from the County. Under these circumstances, you ask whether you would have a voting conflict if you voted on any of these three options.
Option 1: Moving forward with the J & K Septic to Sewer Conversion Project
Let us first examine Option 1, i.e., voting on whether to move ahead with the J & K Septic to Sewer Conversion Project, which would require the lot owners of the 88 residences to participate in the program (even if the program is not fully funded). Section 112.3143(3)(a), Florida Statutes, is the portion of the voting conflicts law within the Code of Ethics for Public Officers and Employees (Part III, Chapter 112, Florida Statutes) that is applicable to local, elective, public officers, such as City Councilmembers. Section 112.3143(3)(a), Florida Statutes, provides:
No county, municipal, or other local public officer shall vote in an official capacity upon any measure which would inure to his or her special private gain or loss; which he or she knows would inure to the special private gain or loss of any principal by whom he or she is retained or to the parent organization or subsidiary of a corporate principal by which he or she is retained, other than an agency as defined in s. 112.312(2); or which he or she knows would inure to the special private gain or loss of a relative or business associate of the public officer. Such public officer shall, prior to the vote being taken, publicly state to the assembly the nature of the officer's interest in the matter from which he or she is abstaining from voting and, within 15 days after the vote occurs, disclose the nature of his or her interest as a public record in a memorandum filed with the person responsible for recording the minutes of the meeting, who shall incorporate the memorandum in the minutes.
Section 112.3143(1)(d), Florida Statutes, defines "special private gain or loss" as:
[A]n economic benefit or harm that would inure to the officer, his or her relative, business associate, or principal, unless the measure affects a class that includes the officer, his or her relative, business associate, or principal, in which case, at least the following factors must be considered when determining whether a special private gain or loss exists:
1. The size of the class affected by the vote.
2. The nature of the interests involved.
3. The degree to which the interests of all members of the class are affected by the vote.
4. The degree to which the officer, his or her relative, business associate, or principal receives a greater benefit or harm when compared to other members of the class.
The degree to which there is uncertainty at the time of the vote as to whether there would be any economic benefit or harm to the public officer, his or her relative, business associate, or principal and, if so, the nature or degree of the economic benefit or harm must also be considered.
The statute prohibits you from voting on any measure that will inure to your "special private gain or loss" or that you know would inure to the special private gain or loss of a principal by whom you are retained, your relative, or your business associate. There is nothing in the facts presented to indicate that a principal by whom you are retained, a relative, or a business associate would be affected by a vote. Therefore, we are only concerned with whether the vote would create a "special private gain or loss" for you. If so, you would incur a voting conflict.
When determining whether a private gain or loss might be "special," one must consider the size of the class that will be affected by the vote, the degree to which all members of the class will be affected, and the degree to which the officer will receive a greater benefit or harm when compared to the other members of the class. In your case, there are 88 residences that would be affected by this vote, but you state that your residence would be in Tier 1, which is only comprised of 18 lots. The estimated cost of removing the septic tanks and installing the lateral lines to connect the residences to the sewer main line is the lowest for the lot owners in Tier 1, i.e., that of $24,420 or less, compared to $62,640 for those in Tier 4.
It is not known at this time, and will not be known at the time of the vote, whether additional funding will eventually be obtained such that the cost of removing the septic tanks and installing the lateral lines for the 88 residences will be fully funded. One must assume that, at the time of the vote, it is a possibility that the Project will not be fully funded, given that the project is not fully funded now. It is also not known whether, in the event of partial funding, any available funding would be disbursed in equal amounts to the lot owners of the 88 residences or whether it would be disbursed proportionally in relation to each property's projected expenses. In either event, if the Project is not fully funded, your out-of-pocket costs will be lower than those of the lot owners of at least 70 of the residences (i.e., those in Tiers 2, 3, and 4)6 because the total cost of your septic-to-sewer conversion ($23,160) would be lower than that of theirs.7 One of the factors that must be considered when determining whether a "special private gain or loss" exists is the degree to which the officer will receive a greater benefit or harm compared to other members of the class. Your financial loss, i.e., the out-of-pocket costs you will have if the Project is not fully funded, will be significantly lower than that of at least 70 of the 88 lot owners. You would, thus, have a "special private loss" under Option 1 and would, therefore, would have a prohibited voting conflict if you voted on it.
In light of this, prior to the vote, if it occurs at all, you must publicly state the nature of your interest in the matter at the City Council meeting, abstain from voting on the matter, and file Commission on Ethics Form 8B, "Memorandum of Voting Conflict for County, Municipal, and Other Local Public Officers," with the person responsible for recording the minutes of the meeting within 15 days after the vote occurs.
Option 2: Withdrawing from the J & K Septic to Sewer Conversion Project
Under Option 2, the City Council would vote on whether to withdraw from the J & K Septic to Sewer Conversion Project. If the City Council chooses this option, the City would send a letter to the Brevard County Natural Resources Department informing it that the City was withdrawing from the J & K Project. There would be no City requirement, however, for the lot owners to install these Advanced Septic Treatment Systems on their properties or to take any other action with regard to their existing septic systems if the City Council voted for Option 2.
Once Option 2 is effective, the lot owners of the 88 residences would then be able to apply individually to the County to receive up to $18,000 per lot if they wanted to install Advanced Septic Treatment Systems, which would reduce the nitrogen load on their properties and, by extension, the nitrogen emanating to the lagoon. The exact amount of County funding a lot owner would be eligible to receive would depend on the estimated nitrogen load of the property and the characteristics of the lot itself, as explained earlier; these costs have not been estimated by the City because the City would not be involved.
We note that Options 1 and 2 are mutually exclusive; the City Council's undertaking of one option necessarily precludes undertaking the other. Thus, a vote concerning Option 2 necessarily affects your special private gain or loss because Option 2 precludes your receipt of the guaranteed gains from the City's disbursement of the SOIRL funds and precludes the mandatory outlay of funds you would personally incur if the program in Option 1 was underfunded (as it currently is). For that reason, we find you will have with a voting conflict if the City Council is presented with a vote on Option 2. If this occurs, you will need to declare the nature of your interest in the matter at the City Council meeting, abstain from voting, and file Commission on Ethics Form 8B within 15 days after the vote, as described above.
Option 3: Delaying taking any action on the J & K Project at this time
Under Option 3, the City Council would delay making any decision regarding the J & K Septic to Sewer Conversion Project. The City would not lose access to the $6,167,373 SOIRL grant funds in the interim, but the lot owners of the 88 residences would not be able to apply for or receive any funding from the County for the Advanced Septic Treatment Systems, as was the case in Option 2.
We have frequently opined that votes that are preliminary or procedural do not create a conflict of interest for a public officer. For example, in CEO 78-74, we opined that a school board member's vote to defer consideration of a matter until the school district could further investigate the matter before voting to make a final determination was entirely procedural and, therefore, did not create a special private gain or loss for him or her.
Here, as was the case in CEO 78-74, Option 3 is a vote that merely defers the agency's consideration of the matter so that a final determination can be made later. A vote on Option 3 would be entirely procedural and would not create a voting conflict for you. Your question is answered accordingly.8
ORDERED by the State of Florida Commission on Ethics meeting in public session on April 21, 2023, and RENDERED this 26th day of April, 2023.
Glenton "Glen" Gilzean, Jr., Chair
The J & K Project is one of approximately 42 projects within Brevard County that have been identified for septic system removal as part of the SOIRL Plan. The SOIRL Plan estimates that the 42 projects cumulatively will reduce 95,816 pounds of nitrogen from the Indian River Lagoon per year, including a 3,748 pound reduction from the City of Cocoa J & K Project. The removal of nitrogen will help lower the amount of pollution in the Lagoon.
For example, if the lot owners of only 50% of the residences agree to convert from septic to sewer under the plan, the $6,167,373 SOIRL grant funds available to the City for the J & K Project would be reduced by 50%.
The proposed sewer line will initially only serve the 88 residences along Indian River Drive, but eventually, in order to move forward with the SOIRL Plan, the City Council will need to make connection to sewer mandatory City-wide, with a few exceptions. It is not known whether there would be funding for this project.
These estimates would include the PVC line, removal of the septic tanks, road base fill, driveways, decks and sidewalks, replacement of trees and shrubs, sod, irrigation repairs, a bore service line and a private pump, if necessary.
Utilizing these septic replacements would not result in the complete removal of unwanted nutrients in the Indian River Lagoon.
 The phrase "at least" 70 lot owners is being used because the cost of your septic-to-sewer conversion may be less than that of others in your Tier (Tier 1), which would make the number of lot owners having to pay more than you greater than 70.
For example, if the 88 lot owners are given the same amount, e.g., $15,000 each, your estimated out-of-pocket cost would be $8,160, compared to an estimated $47,640 for the lot owners in Tier 4. Similarly, if all lot owners received 50% of their total out-of-pocket costs, your estimated out-of-pocket cost would be $11,580, compared to an estimated $31,320 for those in Tier 4.
Once the program under Option 1 has more definition, we encourage you to contact Commission staff to seek guidance as to whether the program will be a conflict of interest under Section 112.313(7)(a), Florida Statutes. This analysis will hinge on details that currently are undecided, according to your opinion request, including whether the City will contract directly with the lot owners and whether the contract will pertain to more than the purchase of utilities services.